Huntington Ingalls Industries, Inc.’s (HII - Free Report) third-quarter 2023 earnings of $3.70 per share increased 7.6% from the $3.44 reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of $3.39 by 9.1%.
Total Revenues
Total revenues came in at $2,816 million, beating the Zacks Consensus Estimate of $2,728.5 million by 3.2%. The top line increased 7.2% from $2,626 million in the year-ago quarter.
Operational Performance
Huntington Ingalls reported segment operating income of $187 million compared with $166 million in the third quarter of 2022. The company’s operating margin expanded 30 basis points from the prior-year quarter’s figure to 6.3%.
The increase in the operating income was primarily driven by higher segment operating income, favorable changes to the operating FAS/CAS adjustment and favorable non-current state income taxes.
Huntington Ingalls received orders worth $5.4 billion in the third quarter. As a result, the company’s total backlog reached $49 billion as of Sep 30, 2023.
Segmental Performance
Newport News Shipbuilding: Revenues totaled $1,453 million in this segment, up 0.6% year over year due to higher volumes in aircraft carrier construction.
The segment reported operating earnings of $90 million in the quarter, which decreased 11.8% year over year.
Ingalls Shipbuilding: Revenues in this segment totaled $711 million, up 14.1% year over year, primarily driven by higher volumes in amphibious assault ships and surface combatants. The segment’s operating income of $73 million increased 46% year over year.
Mission Technologies: Revenues in this segment totaled $685 million, up 15.1% year over year. The upside was primarily driven by higher volumes in mission-based solutions, driven by growth in C5ISR and cyber, electronic warfare and space programs.
The operating income soared 71.4% year over year to $24 million. The increase in the segment operating income was driven by higher volumes in mission-based solutions and improved performance in unmanned systems.
Financial Update
The company’s cash and cash equivalents as of Sep 30, 2023 were $109 million, down from $467 million as of Dec 31, 2022.
The long-term debt as of Sep 30, 2023 was $2,213 million compared with the 2022-end level of $2,506 million. The cash outflow from operating activities for the nine months ended Sep 30, 2023 was $408 million compared with $165 million in the prior-year period.
Guidance
Huntington Ingalls updated its 2023 guidance. The company now expects 2023 shipbuilding revenues in the range of $8.5-$8.6 billion, up from the prior guidance in the range of $8.4-$8.6 billion.
For Mission Technologies, HII now expects revenues of approximately $2.55 billion, up from the prior expectation of $2.5 billion. The company expects free cash flow in the band of $400-$450 million in 2023.
Huntington Ingalls increased the 2023 free cash flow expectation from the $400-$450 million range to nearly $500 million.
Zacks Rank
Huntington Ingalls currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Hexcel Corporation (HXL - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 9.5%. However, the bottom line improved 15.2% from the year-ago earnings of 33 cents per share.
In the third quarter, net sales totaled $420 million, which missed the Zacks Consensus Estimate of $431 million by 2.6%. However, the top line witnessed an improvement of 15% from the year-ago quarter’s $365 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2023 adjusted earnings of $6.77 per share, which beat the Zacks Consensus Estimate of $6.66 by 1.7%. However, the bottom line deteriorated 1.5% from the year-ago quarter's recorded figure.
Net sales were $16.88 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $16.66 billion by 1.3%. The top line rose 1.8% from $16.58 billion reported in the year-ago quarter.
AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2024 adjusted earnings of 78 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents by 6.9%. Earnings surged 27.9% from the year-ago quarter.
In the quarter under review, AAR generated net sales worth $549.7 million. The reported figure surpassed the Zacks Consensus Estimate by 8.7% and increased 23.2% from $446.3 million recorded in the year-ago quarter.
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Huntington Ingalls Industries, Inc.’s (HII - Free Report) third-quarter 2023 earnings of $3.70 per share increased 7.6% from the $3.44 reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of $3.39 by 9.1%.
Total Revenues
Total revenues came in at $2,816 million, beating the Zacks Consensus Estimate of $2,728.5 million by 3.2%. The top line increased 7.2% from $2,626 million in the year-ago quarter.
Operational Performance
Huntington Ingalls reported segment operating income of $187 million compared with $166 million in the third quarter of 2022. The company’s operating margin expanded 30 basis points from the prior-year quarter’s figure to 6.3%.
The increase in the operating income was primarily driven by higher segment operating income, favorable changes to the operating FAS/CAS adjustment and favorable non-current state income taxes.
Huntington Ingalls received orders worth $5.4 billion in the third quarter. As a result, the company’s total backlog reached $49 billion as of Sep 30, 2023.
Segmental Performance
Newport News Shipbuilding: Revenues totaled $1,453 million in this segment, up 0.6% year over year due to higher volumes in aircraft carrier construction.
The segment reported operating earnings of $90 million in the quarter, which decreased 11.8% year over year.
Ingalls Shipbuilding: Revenues in this segment totaled $711 million, up 14.1% year over year, primarily driven by higher volumes in amphibious assault ships and surface combatants. The segment’s operating income of $73 million increased 46% year over year.
Mission Technologies: Revenues in this segment totaled $685 million, up 15.1% year over year. The upside was primarily driven by higher volumes in mission-based solutions, driven by growth in C5ISR and cyber, electronic warfare and space programs.
The operating income soared 71.4% year over year to $24 million. The increase in the segment operating income was driven by higher volumes in mission-based solutions and improved performance in unmanned systems.
Financial Update
The company’s cash and cash equivalents as of Sep 30, 2023 were $109 million, down from $467 million as of Dec 31, 2022.
The long-term debt as of Sep 30, 2023 was $2,213 million compared with the 2022-end level of $2,506 million. The cash outflow from operating activities for the nine months ended Sep 30, 2023 was $408 million compared with $165 million in the prior-year period.
Guidance
Huntington Ingalls updated its 2023 guidance. The company now expects 2023 shipbuilding revenues in the range of $8.5-$8.6 billion, up from the prior guidance in the range of $8.4-$8.6 billion.
For Mission Technologies, HII now expects revenues of approximately $2.55 billion, up from the prior expectation of $2.5 billion. The company expects free cash flow in the band of $400-$450 million in 2023.
Huntington Ingalls increased the 2023 free cash flow expectation from the $400-$450 million range to nearly $500 million.
Zacks Rank
Huntington Ingalls currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Hexcel Corporation (HXL - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 9.5%. However, the bottom line improved 15.2% from the year-ago earnings of 33 cents per share.
In the third quarter, net sales totaled $420 million, which missed the Zacks Consensus Estimate of $431 million by 2.6%. However, the top line witnessed an improvement of 15% from the year-ago quarter’s $365 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2023 adjusted earnings of $6.77 per share, which beat the Zacks Consensus Estimate of $6.66 by 1.7%. However, the bottom line deteriorated 1.5% from the year-ago quarter's recorded figure.
Net sales were $16.88 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $16.66 billion by 1.3%. The top line rose 1.8% from $16.58 billion reported in the year-ago quarter.
AAR Corp. (AIR - Free Report) reported first-quarter fiscal 2024 adjusted earnings of 78 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents by 6.9%. Earnings surged 27.9% from the year-ago quarter.
In the quarter under review, AAR generated net sales worth $549.7 million. The reported figure surpassed the Zacks Consensus Estimate by 8.7% and increased 23.2% from $446.3 million recorded in the year-ago quarter.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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